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Ed Balls asks shadow cabinet for money-saving ideas Ed Balls asks shadow cabinet for money-saving ideas
(35 minutes later)
Ed Balls has asked all shadow cabinet members to set out initial ideas for money-saving public service reforms by the spring in what is being billed as a "zero-based spending review" due to be completed in government.Ed Balls has asked all shadow cabinet members to set out initial ideas for money-saving public service reforms by the spring in what is being billed as a "zero-based spending review" due to be completed in government.
With Labour still trailing on the economy, and Balls personally under relentless political attack by the Tories, the shadow chancellor published a 20-page document setting out how the review would be conducted and reiterating his commitment to bring the deficit and debt down over time. With Labour still trailing on the economy, and Balls personally under relentless political attack by the Tories, the shadow chancellor published a 20-page document setting out how the review would be conducted and reiterating his commitment to bringing the deficit and debt down over time.
In the foreword Balls writes: "We can expect to inherit plans for further deep cuts to departmental budgets at a time when the deficit will still be large and the national debt rising.In the foreword Balls writes: "We can expect to inherit plans for further deep cuts to departmental budgets at a time when the deficit will still be large and the national debt rising.
"At the time of the 2010 spending review, the Office for Budget Responsibility forecast that the deficit would fall to £18bn in 2015-16. It is now forecast to be £79bn – over £60bn higher than planned – even with the further deep cuts in public spending which the chancellor has programmed in for 2015-16.""At the time of the 2010 spending review, the Office for Budget Responsibility forecast that the deficit would fall to £18bn in 2015-16. It is now forecast to be £79bn – over £60bn higher than planned – even with the further deep cuts in public spending which the chancellor has programmed in for 2015-16."
He says as a result the public finances "will be more difficult than at any time in our living memory, certainly since the postwar Labour government of 1945".He says as a result the public finances "will be more difficult than at any time in our living memory, certainly since the postwar Labour government of 1945".
If substantive, the shadow cabinet public service reform proposals will give Balls some protection from those who claim he is hiding the cuts he would implement after the 2015 election.If substantive, the shadow cabinet public service reform proposals will give Balls some protection from those who claim he is hiding the cuts he would implement after the 2015 election.
He has argued ministers cannot implement a full review without the help of civil servants. He has argued ministers cannot implement a full review without the help of civil servants. He claims the "government's fundamental control mechanism has simply been the budget cut while the pressure for public service performance is weaker now than in 2010. There is little pressure to achieve efficiency and to think long-term rather than achieve short-term financial reductions".
He claims the "government's fundamental control mechanism has simply been the budget cut while the pressure for public service performance is weaker now than in 2010. There is little pressure to achieve efficiency and to think long term rather than achieve short-term financial reductions".
He suggests he can achieve reforms by merging services, greater use of technology and stronger financial management, including in local government.He suggests he can achieve reforms by merging services, greater use of technology and stronger financial management, including in local government.
He also suggests there is a lack of accountability for spending in government departments saying the coalition relies "on 'armchair auditors' and departmental business plans that lack any clear accountability mechanisms. We have seen growing hospital waiting lists, the failure of the Work Programme and the universal credit rollout, and chaos over rail franchising and defence procurement. He also suggests there is a lack of accountability for spending in government departments, saying the coalition relies "on 'armchair auditors' and departmental business plans that lack any clear accountability mechanisms.
"The government has wasted £3bn on a top-down reorganisation of the NHS. As a result of the reorganisation, 2,300 managers have received six-figure payoffs, and 2,200 NHS managers been fired and rehired back in the NHS. "The government has wasted £3bn on a top-down reorganisation of the NHS. As a result of the reorganisation, 2,300 managers have received six-figure payoffs, and 2,200 NHS managers been fired and rehired back in the NHS," he says.
"Their school reforms have fragmented leadership and seen school places opening where there are already enough school places – while there is a shortage of primary school places in many areas. Free schools are costing twice as much as originally planned.""Their school reforms have fragmented leadership and seen school places opening where there are already enough school places – while there is a shortage of primary school places in many areas. Free schools are costing twice as much as originally planned."
He reveals he has invited five public sector experts to oversee aspects of the review to be completed before the election. These are likely to lead to specific suggestions for how spending can be switched by Labour to its priority areas likely to be childcare, housing and social care. There is no commitment to ringfence any departmental budget.He reveals he has invited five public sector experts to oversee aspects of the review to be completed before the election. These are likely to lead to specific suggestions for how spending can be switched by Labour to its priority areas likely to be childcare, housing and social care. There is no commitment to ringfence any departmental budget.
The five experts are:The five experts are:
• Alexis Cleveland, former director general for transformational government at the Cabinet Office, advising on "making best use of information and communication technology".• Alexis Cleveland, former director general for transformational government at the Cabinet Office, advising on "making best use of information and communication technology".
• Prof Dermot Cahill, chair of the Institute for Competition and Procurement Studies, advising on "effective public sector procurement".• Prof Dermot Cahill, chair of the Institute for Competition and Procurement Studies, advising on "effective public sector procurement".
• Margaret Exley, former Treasury board member and expert in change management advising on "streamlining, simplification, collaboration and integration".• Margaret Exley, former Treasury board member and expert in change management advising on "streamlining, simplification, collaboration and integration".
• Baroness Jeannie Drake, on "the use of consultants and temporary staff, and wider issues in workforce deployment and capability".• Baroness Jeannie Drake, on "the use of consultants and temporary staff, and wider issues in workforce deployment and capability".
• Ray Shostak, formerly director general (performance) at the Treasury, head of the prime minister's delivery unit and international expert in public service performance on "strengthening incentives and accountability for improving performance and efficiency".• Ray Shostak, formerly director general (performance) at the Treasury, head of the prime minister's delivery unit and international expert in public service performance on "strengthening incentives and accountability for improving performance and efficiency".
The document sets out no new fiscal rules or commitments but says public sector net debt will still be growing well into the next parliament with the government currently on track to break its fiscal mandate to get debt falling as a percentage of GDP by 2015-16. The document sets out no new fiscal rules or commitments but says public sector net debt will still be growing well into the next parliament, with the government currently on track to break its fiscal mandate to get debt falling as a percentage of GDP by 2015-16.
Labour will not only have to balance the books, but set a course for bringing the national debt down over time. Labour will not only have to balance the books, but set a course for bringing the national debt down over time. The report cites three areas where the government might be able to merge services – health, housing and social care services for the elderly; health, social services and education for vulnerable children; and the range of judicial and support services needed to deal with young offenders.
The report cites three areas where the government might be able to merge services – health, housing and social care services for the elderly; health, social services and education for vulnerable children; and the range of judicial and support services needed to deal with young offenders.
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